A Gift to Planet Earth and Humanity
A miracle has occurred. Many were beginning to contemplate a survival strategy because of the dual hammer of Peak Oil and Global Warming. But a funny thing happened on our way to doomsday. It is appearing that we are getting a reprieve, and, ironically, the gift is this serious, but fixable, economic collapse.
An absolutely incredible prognostication in Bloomberg is that January delivery will see crude oil below $20/barrel and oil traders are today purchasing gasoline for $0.97/gallon. What does all this mean?
Let us look at some historical consequences. Much of this is detailed in Chapter 1 of SIMPLE SOLUTIONS for Planet Earth found in one of the boxes on the right, but the price of gasoline in 1973 (all the following will be in 2008 dollars) was $1.80/gal when the First Energy Crisis increased the price to $2.30/gal. The Second Energy Crisis of 1979 kicked it up to $3.17/gal in 1981. Gasoline then, with a small uptick due to the Gulf War of 1991, declined to $1.35/gal in 1998. That was the absolutely lowest real price of gasoline in history.
On July 11, 2008, petroleum skyrocketed to $147.27/bbl, causing gasoline to sell for $4.12/gallon on July 17. Gasoline on December 5 subsequently crashed to $1.77/gallon, 57% lower. The stock market only declined about half that in this interim.
This time, then, the economy affected oil prices, as the recession is reducing use, causing an oversupply. Following the First and Second Energy Crises, higher oil prices dampened the economy. After recovery, oil (and gasoline) prices dramatically dropped. The key question is, will this next recovery raise oil prices? Yes, of course.
We can thus expect the following:
1. Oil could drop below $30/bbl.
2. Gasoline prices might plunge below $1/gallon. This will be the lowest gasoline will ever be in all of history, even if the decline only settles down to $1.34/gallon.
3. If no Solar Manhattan effort occurred in 1982 when gasoline prices were near the modern day high, what are the prospects of anything monumental happening when it will be at an ALL-TIME LOW when Barack Obama becomes President on January 20? Remember, T. Boone Pickens, with all his sincere bluster, abandoned his wind farms when oil was still more than $50/barrel.
4. The economy will recover. It might take all of a year if there is no depression, but, certainly, in 5 years.
5. If, in the meantime, oil does rise to $75/barrel in a year or two, the slack now available to producers will delay any sudden escalation, for OPEC can increase production as necessary. However, the surging economies of China, India and rest of the world will almost surely further escalate the price beyond $100/barrel, maybe up to $200/barrel, in five to ten years. There is such a thing as Peak Oil, and there is mounting evidence that the Middle East does not really have as much of this resource as they claim.
In grand summary, then, this world economic collapse could well be a gift to Planet Earth and Humanity, for Peak Oil will be delayed, carbon dioxide in our atmosphere will be somewhat alleviated and, thankfully, we will have this five to fifteen year period to work on sustainable options that can begin to competitively replace fossil fuels.
The following simple solutions can be recommended:
1. Take advantage of this "gift" of time and comprehensively prepare for a sustainable energy economy. The Obama energy transition team and the new Congress can either instill a yes we can change...or royally blow it.
2. As research and development are only a fraction of actual commercial investments, government can cost-effectively and should expeditiously partner with industry and academia to plan for, fund and implement a visionary renewable energy mandate, even more monumental than the Apollo Project.
3. Smartly insert a carbon tax linked to the price of oil, now. As crude prices increase, so will, thus, this tax. At $30/barrel, something like a 2 cents / pound carbon dioxide tax is significant but tolerable. When oil eventually jumps to $150/barrel, the tax should be proportionately higher, at 10 cents / pound carbon dioxide. The revenues should fund renewable energy and conservation programs.
4. To kick-off the Planet Earth rescue strategy, immediately add a $1/gallon gasoline investment surcharge (also known as a tax, but the semantics can't hurt--and remember, Europe and many parts of the world already pay twice as much for pumped gas), which will result in nearly $150 million/year, also to be applied to the Obama Sustainable Energy Plan.
Society barely reacted after the First Energy Crisis of 1973. We did absolutely nothing after the Second Energy Crisis in 1979. Let us use this "gift" to act wisely this time.
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Patrick,
Without getting into the mountains of data and compiled information regarding peak oil and the global economy which are available all over the net, I would offer only my perspective that optimism is merely an elegant form of denial.
The economy cannot recover. Growth requires a growth in energy supplies which is not possible. And since this debt-based economy must grow to survive, it must die.
The only real opportunity that remains is to lay all of the available pieces of the puzzle on the table, get the best view of the picture possible, face up to the probable reality that industrial human society is now on the final approach to total collapse, and finally, embark on a course of action based on this realization.
Nowhere is there being readied a plan for doing with less. Everywhere there is being touted the hype of more consumption. We remain on a vector to hit the wall with the pedal to the metal. It is going to hurt a whole lot more than it would have had we slowed down.
This problem, like terminal cancer, is one without a solution. We need to quit hoping against hope.
or so it seems to...
~toktomi~
A year ago, with Emeritus Professor Fred Riggs, I sat in on an energy course taught by two eminent geophysicists at the University of Hawaii. With some of their lecturers, they felt compelled to present the same message as you: it’s too late, and the best strategy is to maximize your personal survival. Well, Fred and I felt that giving up was not an acceptable option, so he created a sustainability web page
and we had all kinds of activities going. Click on the site and dream a bit. Well, earlier this year, at the age of 90, he passed away, and world will suffer, for the best I could do was pass on this effort to a gifted students high school organization…and I’m afraid they had more important things to do. Thus, maybe you’re right. Yet, I continue to hope not and thought that the Huffington Post was the ideal vehicle to make a difference. Well, after more than 30 postings, I’m wondering if I’m again off on another Man from La Mancha mission. Help!
I noticed in the "pending approval" version that Fred's web page was not properly transferred, so, if, indeed, not, here is another attempt:
http://webdata.soc.hawaii.edu/fredr/SUSTAIN%20OUR%20WORLD.html#end
Appreciate that this link was created overnight by a 90 year with a zeal to save Planet Earth and Humanity. The least I can do is to bring this site to the attention of the world.
Here is another gift for planet earth, probably the most unique gift you can get anyone this Holiday Season. A carbon offset gift card from LIvClean.ca
Check it out at
http://www.livclean.ca/news.php
Professor Takahashi,
Thank you for this.
For a while in the 70's we had 55mph speed limits, which were widely enforced.
We will know Americans are serious about oil self-sufficiency when we reduce our highway speed limits and voluntarily travel within those limits.
I really appreciate your replying to comments. Others commenters expressed some of the same thoughts and questions that I had, and your responses are very helpful. That rarely happens here at HuffPo, and so I want to thank you.
Ditto to this. I am not a frequent reader here, but I do appreciate some interaction. I thought that was the whole point of this web 2.0 nonsense anyway. I guess maybe some writers here are missing the point. I often get as much or more from reading well informed comments as I do from original posts...
Patrick,
Lower oil prices are not "pushing back peak oil" at all. Peak oil is a problem of geology and technology, not economics. You can't push it back with lower prices (or higher prices). The only way you can push peak oil back is by developing production capacity to offset production losses in existing fields.
Lower prices will likely bring peak oil closer to us because lower energy prices create no incentive to look for more oil. The same can be said for alternative energy development - which you correctly referenced.
The oil price crash is not doing anything good. Instead, it is sending the signal to consumers that they can go out and consume more oil. In turn, it is sending the signal to producers that now is not the time to pay for development of additional production.
To Patrick and everyone else. Please take the time to read sites like mine and others to get informed about Peak Oil. If you care enough to write about it, then you should care enough to read about it too.
boat drinks,
mike
http://www.thedoomletter.com
Dear Mike:
You're right, of course, not only on Peak Oil, but also Global Warming. The "gift," more than anything else, has to do with buying some time so we can do it right this next time...IF WE CAN MAINTAIN THE WILL. The currently low price of oil will delay Peak Oil maybe a few months, which is almost meaningless because we're probably there already, and China continues to bring on line those coal powerplants. Across the board, though, governments and companies are already delaying or terminating ambitious renewable energy programs in reaction to lowered oil/gasoline prices, so we now have a crisis of commitment. A good part of this unfortunately is warranted, as financial analysts, looking at the bottom line, will more and more tend to recommend prudence (meaning don't go crazy about replacing conventional with more expensive sustainables). We have a hard time in this country making smart long-term, life cycle...add whatever else terms you want...decisions.
By the way, I went to your website. Libertarian and doom, what a combination! However, your postings are nice and short and well supported. I'm not saying I agree with everything you say, but, then, I don't necessarily agree with what I say all the time.
Nice to know there are still some optimists out there. I am not nearly as hopeful. Low fuel prices may mean the end of searching for alternatives, just as it did last time. I would like to see something different, but I don't expect to.
I agree with all you said. The whole point of this posting, though, is, IF THE REAL PRICE OF OIL DROPS TO THE LOWEST LEVEL EVER IN HISTORY, as seems destined to occur next month, will the Obama Administration follow through on their good intentions? On June 2 I published in the Huffington Post Why is there No National Energy Policy? The problem identified was the will of the people. Issues such as global warming and Peak Oil have just not been important enough to most of us. I worry that the free fall of gasoline costs will again serve to delay any monumental effort to end our addiction to oil. Then, when oil shoots past $100/barrel again, as it surely will, we will wonder what happened. Are we smart enough to do it right this time?
Lets hope we get it right this time. The next time it goes back up it will be so expensive that many Americans won't be able to afford it at all. (although there were some Americans already alienated when it was over $4/gal.) We need to break free!
Our country is in deep economical trouble and it just amazes me how little credit has been given to the high cost of fuel this past year. That one single factor alone has been solely responsible for putting more businesses out of business and more homeowners out of their home than any other factor. The historically high cost of gas affects every single aspect of our economy and society. Jeff Wilson just released a book called The Manhattan Project of 2009 Energy Independence NOW. He outlines all our uses of oil, things I never even considered. Our depletion, which is even scarier, this is a finite source of energy. It will run totally out and not in the too distant future. We have so much available to us, wind and solar which are free, we just need to harness them. And plug in car technology. It would cost the equivalent of 60 cents a gallon to charge. A company called Better Place is setting up infrastructures in 3 major CA cities as well as Hawaii to support electric cars. We need to sink some of this bail out money into makine America energy independnet!
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